"A WRONG PRINCIPLE"

Evening Post, Volume CXI, Issue 142, 18 June 1931, Page 13

"A WRONG PRINCIPLE"

STATE LIFE CUTS

PAYMENT TO PUBLIC ACCOUNTS

When the Government put forward its proposal to pay the amount of the salary cut in the Government Life Insurance Department into the Public Account, a protest was entered by tho Public Service Association, which pointed out that the Department had always been a mutual oflice, that all profits had boen divided among, the policyholders, and "that its. funds had always been separate from the Public Accounts.

The Prime Minister (the Eight Hon. G. W. Forbes.) replied that the Economy Committee was of opinion that' the benefit arising from tho reduction in salaries in respect of all Public Servants should accrue to the Consolidated Fund. "It must be remembered," he said, "that the. Government Life Insurance Department's progress has ,beon maintained with the aid of a guarantee from the Consolidated Fund. That is to say,'had the Department at any time been unablo to meet the claims made upon it, the Consolidated Fund would hayobeon called upon to make up the deficiency. It is not unreasonable, therefore, when the Consolidated Fund is called upon to face the unprecedented' financial position that at present obtains, to requiro some extra return for the assistance it has given the Department, which assistance has not been enjoyed by competing companies." This reply is condemned in the current issue of tho "Public Service Journal""'as "weak to the point of absurdity, as during its.6o years' working the Department has uever had to call on the Government to assist it." "By sound methods," states the "Journal," "the Department has been a success from the start and is now ; in a stronger position-than ever. The Government has boen well repaid 'for any use the guarantee by the State may have been, to- the Department, as the latter has assisted the former many tiinesby the purchase of Government securities, etc. The guarantee-was a gift 60 years ago With no, question of payment for it. It remained, for the present Government to use the guarantee as an excuse to grab the 'cut;-' The amount seized will not affect the profits of the Department, but the seizure; gives the agents of rival offices room to make misleading statements which may retard the progress of the Department somewhat. It is. absolutely wrong for any Government to put a permanent disability on one of its own institutions merely owing to a temporarily strained financial position. The country has faced as difficult, if not more .difficult, positions on1 occasions, but no Government has until now stooped to what practically-amounts to interference by special enactment with trust imoneys."